Sarvamangal Mercantile Co. Ltd Directors Report

Dear Members,

The Directors have pleasure in presenting the 41^st Annual Report of the Company together with the Audited Financial Statement(s) for the year ended March 31, 2024.

1. Financial Performance:

2. Operations of the Company

Total Income for the year ended March 31, 2024 amounted to Rs. 132.66 lakhs as against Rs. 155.33 lakhs in the previous Financial Year. The Companys Total Income decreased by 17.09% over the previous financial year.

Net Profit for the year ended March 31, 2024 amounted to Rs. 38.56 lakhs as against Rs. 23.06 lakhs in the previous Financial Year. The Companys Net Profit increased by 40.20% over the previous financial year.

3. Dividend

To conserve the resources the Board of Directors do not recommend any dividend for the Financial Year 2023-24.

4. Share Capital

The Authorized Share Capital of the Company as on March 31, 2024 is Rs 50.00 Lakhs and the Paid-up Share Capital as on March 31, 2024 is Rs. 24.90 Lakhs. There was no change in Share Capital of the Company during the year.

5. Directors and Key Managerial Personnel

During the year, In the Board of Directors and Key Managerial Personnel (KMP) of the Company from the closure of financial year till the date of signing of this report, the following changes have taken places:

No Directors are liable to retire by rotation.

Board Composition as on the date of Signing of this Report i.e. June 21, 2024

* Mrs. Vandana Somani Joined on the Board on May 30, 2024 as Additional Director of the Company and on June 21, 2024, she was appointed as Managing Director of the Company.

During the year there was change in Key Managerial Personnel of the Company. The Chief Financial Officer & the Company Secretary & Compliance Officer as on the date of Signing of this Report i.e. June 21, 2024 is as below

Resignation of Directors/KMP during the financial year upto the date of signing of this report is as below:

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013

(‘the Act). In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

6. Performance Evaluation of the Board

Pursuant to provisions of the Companies Act, 2013 the Board has carried out an Annual Evaluation of its own performance, performance of the Individual Directors as well as the Evaluation of the working of its Committees.

A separate meeting of Independent Directors of the Company, without the attendance of Non-Independent Directors and members of management, was held on February 13, 2024 as required under Schedule IV to the Companies Act, 2013 (Code for Independent Directors).

The Board expressed their satisfaction with the evaluation process & the Directors performance.

7. Meetings of Board

The details of Board Meeting and attendance of Directors during the year under review are as below:

8. Details of Committees of the Board:

At present, the Board has following two (2) Committees: - Audit Committee and - Nomination and Remuneration Committee.

a) Audit Committee

The constitution, composition, terms of reference, role, powers, rights, obligations of Audit Committee are in conformity with the provisions of Section 177 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers) Rules, 2014.

The Audit Committee consists of the following Members as on March 31, 2024:

The Audit Committee has adequate powers and detailed terms of reference to play an effective role as required under Section 177 of the Companies Act, 2013, which inter alia include overseeing financial reporting processes, reviewing periodic financial results, financial statements and adequacy of internal control systems with the Management, approval of related party transactions, recommendation of appointment and remuneration of Auditors of the Company and etc. During the year, there are no instances where the Board had not accepted the recommendations of the Audit Committee.

The details of Meeting and attendance of the Audit Committee during the year under review are as below:

Change in Composition of Audit Committee

The Audit Committee was reconstituted w.e.f from May 30, 2024 with the following members

b) Nomination and Remuneration Committee and Policy on Directors Appointment and Remuneration

The constitution, composition, terms of reference, role, powers, rights, obligations of Nomination and Remuneration Committee are in conformity with the provisions of Section 178 and all other applicable provisions of the Companies Act, 2013, read with the 22Companies (Meetings of Board and its Powers) Rules, 2014.

The Nomination and Remuneration Committee consists of the following Members as on March 31, 2024:

The details of Meeting and attendance of the Nomination and Remuneration Committee during the year under review are as below:

The purpose of the Nomination & Remuneration Committee shall be to review and to discharge the Boards responsibilities related to remuneration of the Managing Director, Key Managerial Personnel, and Senior Management. The Committee has the overall responsibility for formulation of criteria of evaluation of Independent Director, identifying persons who are qualified to become a Director and appointment of Senior Management Personnel.

The Nomination & Remuneration Committee was reconstituted w.e.f from May 30, 2024 with the following members

9. Risk Management and Internal Financial Control Systems and their adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its Business & risk management including adherence to the Companys Policies, the safeguarding of its Assets, the prevention and detection of frauds and errors, the accuracy and the completeness of the accounting records and timely preparation of reliable financial disclosure and other regulatory and statutory compliances and there were no instance of fraud reported during the year under review.

The Companys internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate.

10. Particulars of contracts or arrangements with related parties.

The Company does not have any contract or arrangement or transaction with related party in terms of Section 188 of the Companies Act, 2013. Hence, the disclosure required to be provided under Section 134(3) (h) of the Companies Act, 2013, in Form AOC 2 is not applicable and need not to be furnished.

The Disclosures as required under IND AS - 24 ‘Related Party Disclosures notified under

Rule 7 of the Companies (Accounts) Rules, 2014 have been provided in the Notes forming part of the Financial Statements.

a) Statutory Auditors

At the Annual General Meeting of the Company held on September 30, 2022, R. Soni & Co., Chartered Accountants (FRN No. 130349W), were appointed as Statutory Auditors of the Company to hold office from conclusion of 39^th Annual General Meeting until the conclusion of Annual General Meeting to be held in the year 2027. Further, the report of the Statutory Auditors along with notes to Schedules is a part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

b) Secretarial Auditor and Secretarial Audit Report

The Board had appointed Ms Mayuri Thakkar, Practicing Company Secretaries, Membership No. F12337 (COP No. 26189, Peer Review Certificate no. 2858/2022) to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2023-24. The Report of Secretarial Auditor for the Financial Year 2023-24 is annexed to this report as Annexure IV.

The Board in its meeting held on May 30, 2024 has appointed M/S Smita Prabhu & associates, Practicing Company Secretary (Membership No. F8337; COP No. 10859, Peer Review Certificate no. 1536/2021) as the Secretarial Auditor for the financial year 2024-25.

c) Cost Auditor

During the year under review, your Company was not required to maintain cost records under Section 148(1) of the Act. Hence, the provisions related to appointment of Cost Auditor is not applicable. Further, no fraud in terms of the provisions of Section 143(12) of the Act, has been reported by the Auditors in their reports for the year under review.

12. Directors Responsibility Statement

Pursuant to Section 134 (3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(I) that in the preparation of the annual accounts for the year ended 31^st March, 2024 the applicable Accounting Standards have been followed.

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the Provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts for the year ended 31^st March, 2024 on a ‘going concern basis.

(v) that the Directors have laid down internal financial control and that such internal financial control are adequate.

(vi) that the Directors have devised proper system to ensure compliance with the Provisions of all applicable laws.

13. Particulars of Loans, Guarantees and Investments.

Particulars of Loans, Guarantees and Investment as required under Section 186 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 are given in Notes forming part of Financial Statements.

14. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Informations as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is given in Annexure II forming part of this Report.

15. Disclosures Relating to Remuneration of Directors, Key Managerial Personnel And Particulars of Employees.

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ Employees of your Company is appended in Annexure I forming part of this Report.

16. Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism cum Whistle Blower Policy (‘Vigil Mechanism) in place. The Vigil Mechanism is a system for providing a tool to the employees of the Company to report violation of personnel policies of the Company, unethical behavior, suspected or actual fraud, violation of code of conduct. The Company is committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization.

The Policy provides for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Board of Directors affirm and confirm that no employee of the Company has been denied access to the Committee.

Details of the Vigil Mechanism are available on the Companys website www.sarvamangalmercantile.in

17. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace.

The Company has in place adopted Policy on Prevention, Prohibition and Redressal of Sexual Harassment. The policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto.

Further as there are only 5 employees in the Company, the Company is not required to constitute Internal Complaints Committee under the provisions of Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has not received any complaint of sexual harassment during the Financial Year 2023-24.

18. Annual Return

Pursuant to the amended provisions of Section 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company for Financial Year 2023-24 in Form MGT-7 is available on the Companys Website at www.sarvamangalmercantile.in

19. Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report and is annexed as Annexure III.

20. Certificate of Non-disqualification of Directors

In terms of Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the certificate of Non-Disqualification of Directors as received from Ms Mayuri Thakkar, Practicing Company Secretaries, Membership No. F12337 (COP No. 26189, Peer Review Certificate no. 2858/2022) is annexed to this report as Annexure V.

21. Other Disclosures/Reporting:

The Directors further state that during the year under review: a) no amount is transferred to General Reserve; b) there was no change in nature of Business; c) the Company does not have any subsidiary, Associate or Joint Venture with other Companies d) the Company has not taken any deposits from Public or Shareholders of the Company; e) there were no significant / material orders passed by the Regulators or Courts or Tribunals impacting going concern status of your Company and its operations in future; f) there were no other material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which these financial statements relate and the date of this Report and g) there are no qualifications, reservation or adverse remark or disclaimer made by the Statutory Auditors in their Report

22. Secretarial Standards

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to

‘Meetings of the Board of Directors and ‘General Meeting, respectively, have been duly followed by the Company.

23. Disclosure regarding corporate insolvency resolution process initiated / pending under the insolvency and bankruptcy code, 2016 (IBC):

There are no proceedings initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016.

24. Particulars of Employees and Related Disclosures

The Board of Directors wishes to express its appreciation for the outstanding contribution made by the employees to the operations of the Company during the year. The Company maintains cordial relationship with its employees.

25. Acknowledgement

The Directors express their deep gratitude for the co-operation and support extended to the Company by its stakeholders.